The Singapore Exchange (SGX) will launch futures contracts next month, including iron ore, the bourse said on Wednesday, as it aims to keep and attract more US clients faced with tougher over-the-counter trading rules.
The move by SGX, which clears the bulk of globally traded iron ore swaps, shows how exchanges outside the United States are acting to ensure Washington's regulatory net over the world's $640-trillion OTC market does not dent their US client base. "We are committed to helping our customers throughout Asia, Europe and the United States navigate the complexity of rapidly evolving risk management and regulatory requirements," Michael Syn, head of derivatives at SGX, said in a statement.
Reuters first reported SGX's plan in December. SGX said the futures contracts, which will also include freight and oil and will be offered from February 25, will be fully fungible, with bilateral swaps now cleared by the exchange. SGX clears more than 90 per cent of globally traded iron ore swaps.
The volume hit a record 108.9 million tonnes in 2012.